NYSE:AWK

Stock Analysis Report

American Water Works Company

Executive Summary

American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States and Canada.

Snowflake

Solid track record established dividend payer.


Similar Companies

Share Price & News

How has American Water Works Company's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AWK has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.3%

AWK

1.9%

US Water Utilities

0.5%

US Market


1 Year Return

31.7%

AWK

27.5%

US Water Utilities

16.1%

US Market

Return vs Industry: AWK exceeded the US Water Utilities industry which returned 27.5% over the past year.

Return vs Market: AWK exceeded the US Market which returned 16.1% over the past year.


Shareholder returns

AWKIndustryMarket
7 Day2.3%1.9%0.5%
30 Day-1.5%-3.0%3.9%
90 Day-1.8%-0.7%6.6%
1 Year34.1%31.7%29.8%27.5%18.7%16.1%
3 Year76.5%66.3%66.4%56.8%47.2%37.7%
5 Year155.1%129.9%133.7%109.6%61.5%43.7%

Price Volatility Vs. Market

How volatile is American Water Works Company's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is American Water Works Company undervalued compared to its fair value and its price relative to the market?

34.46x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: AWK ($120.57) is trading above our estimate of fair value ($45.47)

Significantly Below Fair Value: AWK is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: AWK is good value based on its PE Ratio (34.5x) compared to the Water Utilities industry average (37.3x).

PE vs Market: AWK is poor value based on its PE Ratio (34.5x) compared to the US market (18x).


Price to Earnings Growth Ratio

PEG Ratio: AWK is poor value based on its PEG Ratio (3.9x)


Price to Book Ratio

PB vs Industry: AWK is overvalued based on its PB Ratio (3.5x) compared to the US Water Utilities industry average (2.7x).


Next Steps

Future Growth

How is American Water Works Company forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

8.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AWK's forecast earnings growth (8.9% per year) is above the savings rate (2.7%).

Earnings vs Market: AWK's earnings (8.9% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: AWK's earnings are forecast to grow, but not significantly.

Revenue vs Market: AWK's revenue (4.6% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: AWK's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AWK's Return on Equity is forecast to be low in 3 years time (11.2%).


Next Steps

Past Performance

How has American Water Works Company performed over the past 5 years?

5.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AWK has high quality earnings.

Growing Profit Margin: AWK's current net profit margins (17.8%) are higher than last year (13.3%).


Past Earnings Growth Analysis

Earnings Trend: AWK's earnings have grown by 5.6% per year over the past 5 years.

Accelerating Growth: AWK's earnings growth over the past year (39.9%) exceeds its 5-year average (5.6% per year).

Earnings vs Industry: AWK earnings growth over the past year (39.9%) exceeded the Water Utilities industry 3.1%.


Return on Equity

High ROE: AWK's Return on Equity (10.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is American Water Works Company's financial position?


Financial Position Analysis

Short Term Liabilities: AWK's short term assets ($799.0M) do not cover its short term liabilities ($1.5B)

Long Term Liabilities: AWK's short term assets ($799.0M) do not cover its long term liabilities (14.6B)


Debt to Equity History and Analysis

Debt Level: AWK's debt to equity ratio (147.8%) is considered high.

Reducing Debt: AWK's debt to equity ratio has increased from 120.5% to 147.8% over the past 5 years.

Debt Coverage: AWK's debt is not well covered by operating cash flow (14.6%).

Interest Coverage: AWK's interest payments on its debt are well covered by EBIT (3.2x coverage).


Balance Sheet

Inventory Level: AWK has a high level of physical assets or inventory.

Debt Coverage by Assets: AWK's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is American Water Works Company's current dividend yield, its reliability and sustainability?

1.66%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years1.8%

Current dividend yield vs market & industry

Notable Dividend: AWK's dividend (1.66%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: AWK's dividend (1.66%) is low compared to the top 25% of dividend payers in the US market (3.65%).


Stability and Growth of Payments

Stable Dividend: AWK's dividends per share have been stable in the past 10 years.

Growing Dividend: AWK's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (54.6%), AWK's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AWK's dividends in 3 years are forecast to be covered by earnings (56% payout ratio).


Next Steps

Management

What is the CEO of American Water Works Company's salary, the management and board of directors tenure and is there insider trading?

3.7yrs

Average management tenure


CEO

Susan Story (59yo)

5.5yrs

Tenure

US$4,983,114

Compensation

Ms. Susan N. Story has been the President and Chief Executive Officer of American Water Works Company, Inc. since May 9, 2014. She served as the Chief Financial Officer and Senior Vice President of America ...


CEO Compensation Analysis

Compensation vs Market: Susan's total compensation ($USD4.98M) is below average for companies of similar size in the US market ($USD11.01M).

Compensation vs Earnings: Susan's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.7yrs

Average Tenure

58yo

Average Age

Experienced Management: AWK's management team is considered experienced (3.7 years average tenure).


Board Age and Tenure

2.7yrs

Average Tenure

59yo

Average Age

Experienced Board: AWK's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: AWK insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$1,291,80004 Sep 19
George MacKenzie
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$129.18
SellUS$470,56907 Aug 19
Loyd Warnock
EntityIndividual
Role
Senior Key Executive
Senior Vice President of External Affairs & Business Development
Shares4,023
Max PriceUS$117.07
SellUS$380,69905 Jun 19
Walter Lynch
EntityIndividual
Role
Chief Operating Officer
Executive VP & COO
Shares3,372
Max PriceUS$112.90
BuyUS$33704 Jun 19
Jeffrey Edwards
EntityIndividual
Role
Member of the Board of Directors
Independent director
Shares3
Max PriceUS$112.47
BuyUS$8,82329 Nov 18
Susan Story
EntityIndividual
Role
Chief Executive Officer
President
Shares96
Max PriceUS$91.91

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Susan Story (59yo)

    President

    • Tenure: 5.5yrs
    • Compensation: US$4.98m
  • Michael Sgro (60yo)

    Executive VP

    • Tenure: 4.8yrs
    • Compensation: US$1.77m
  • Walter Lynch (56yo)

    Executive VP & COO

    • Tenure: 3.8yrs
    • Compensation: US$2.04m
  • M. Hardwick (56yo)

    Executive VP & CFO

    • Tenure: 0.3yrs
  • Aldie Warnock (59yo)

    Senior Vice President of External Affairs & Business Development

    • Tenure: 2.3yrs
    • Compensation: US$1.17m
  • Maureen Duffy (49yo)

    Vice President of Communications & Federal Affairs

    • Tenure: 0yrs
  • Ed Vallejo (59yo)

    Vice President of Investor Relations

    • Tenure: 3.2yrs
  • Melissa Wikle (53yo)

    VP, Controller & Principal Accounting Officer

    • Tenure: 3.3yrs
  • Mark Smith (59yo)

    Chief Information Officer & VP

    • Tenure: 7.2yrs
  • Radha Swaminathan (57yo)

    Executive VP and Chief Customer

    • Tenure: 3.7yrs

Board Members

  • Pat Kampling (59yo)

    Independent Director

    • Tenure: 0.3yrs
  • George MacKenzie (70yo)

    Independent Director

    • Tenure: 16.3yrs
    • Compensation: US$270.68k
  • Julia Johnson (56yo)

    Independent Director

    • Tenure: 11.3yrs
    • Compensation: US$261.14k
  • Martha Goss (69yo)

    Independent Director

    • Tenure: 16.1yrs
    • Compensation: US$248.17k
  • Susan Story (59yo)

    President

    • Tenure: 5.5yrs
    • Compensation: US$4.98m
  • Ronee Hagen (73yo)

    Independent Director

    • Tenure: 3.8yrs
    • Compensation: US$237.77k
  • Karl Kurz (57yo)

    Non-Executive Chairman

    • Tenure: 1.5yrs
    • Compensation: US$342.91k
  • Jeff Edwards (57yo)

    Independent director

    • Tenure: 1.7yrs
    • Compensation: US$229.42k
  • Kimberly Harris (55yo)

    Independent Director

    • Tenure: 0.3yrs
  • Jim Stavridis (64yo)

    Independent Director

    • Tenure: 1.7yrs
    • Compensation: US$229.42k

Company Information

American Water Works Company, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: American Water Works Company, Inc.
  • Ticker: AWK
  • Exchange: NYSE
  • Founded: 1886
  • Industry: Water Utilities
  • Sector: Utilities
  • Market Cap: US$21.796b
  • Shares outstanding: 180.78m
  • Website: https://www.amwater.com

Number of Employees


Location

  • American Water Works Company, Inc.
  • 1 Water Street
  • Camden
  • New Jersey
  • 8102
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AWKNYSE (New York Stock Exchange)YesCommon StockUSUSDApr 2008
AWCDB (Deutsche Boerse AG)YesCommon StockDEEURApr 2008
AWKWBAG (Wiener Boerse AG)YesCommon StockATEURApr 2008
0HEWLSE (London Stock Exchange)YesCommon StockGBUSDApr 2008
AWK *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNApr 2008

Biography

American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States and Canada. It offers water and wastewater services to approximately 1,600 communit ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/21 00:19
End of Day Share Price2019/11/20 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.